The book publisher Yearimdang Publishing(036000), known for the educational comic series "Why?," acquired Future Hightech, an unlisted company that makes semiconductor equipment. The plan is to enter a new line of business using about 200 billion won in cash secured by selling control of T'way Air.
However, Yearimdang Publishing's share price fell after the investment plan was announced. Even though the semiconductor industry is in a super-boom, the relatively small scale of Future Hightech's business and the view that Yearimdang Publishing bought the company at a high price appear to be weighing on the stock.
According to the Financial Supervisory Service's electronic disclosure system on the 26th, Yearimdang Publishing said it would acquire 900,000 shares (90% equity) of Future Hightech for 33.95125 billion won. The purchase price is 13.27% of Yearimdang Publishing's equity capital (255.8 billion won).
Future Hightech makes parts for semiconductor test equipment. Its main product is a motherboard for high bandwidth memory (HBM) burn-in (a process that tests whether chips operate properly at high temperatures) testers. According to the company, most revenue comes from a first-tier supplier to SK hynix. In the first half of this year, revenue was 21.6 billion won and net income was 3.6 billion won.
Yearimdang Publishing was able to push ahead with bold expansion thanks to securing large funds by selling control of T'way Air. Earlier, Yearimdang Publishing sold 44.47 million shares of T'way Holdings to the Sono Trinity Group for about 212.4 billion won. On the back of increased retained earnings, it paid dividends for the first time in 12 years and moved to secure new growth drivers.
Yearimdang Publishing said, "We determined we had to generate revenue as quickly as possible by using the funds we secured," and added, "Because semiconductors are a highly profitable industry, we decided to acquire Future Hightech."
Yearimdang Publishing expects that investing in a semiconductor company can improve profitability as weakness continues in its core publishing business. In the first half of this year, Yearimdang Publishing's revenue was only 5.6 billion won and it posted a loss. By contrast, total equity stood at 264.7 billion won as of the end of June.
The market outlook for HBM testers is also positive. Shinhan Investment & Securities estimated that domestic memory makers' HBM production capacity this year will increase by more than 80,000 wafers from a year earlier. Accordingly, it projected demand in Korea this year for HBM burn-in testers at around 220 to 230 units.
According to the semiconductor industry, once a vendor is selected as a major supplier for HBM test equipment, long-term relationships are likely due to the equipment's characteristics. A semiconductor industry official said, "HBM test equipment must undergo about six months of performance qualification testing and about three to six months of mass-production qualification testing, so once a vendor is selected, long-term supply relationships are maintained," adding, "In particular, because HBM is priced higher than commodity memory and a 1 percentage point Production yield difference determines profitability, vendor replacement is difficult."
However, contrary to the company's expectations, the market appears highly concerned about the decision. On the 25th, Yearimdang Publishing's stock fell 7.5%. Since Yearimdang Publishing, whose main business is publishing, is moving into the semiconductor industry, which has little connection to its existing operations, there are worries about whether it can create business synergies after the acquisition.
Some also argue that Yearimdang Publishing overpaid for Future Hightech. Another KOSDAQ-listed company, Soosung Webtoon(084180), sold a 64.21% equity stake in Future Hightech for 9.4 billion won in Nov. last year. Because Soosung Webtoon sold the stake to repay borrowing fund, it likely did not get full value. Even so, in less than a year, there is a large gap between the sale price at the time (140 billion won when converted to a 90% equity basis) and the price Yearimdang Publishing paid.
In response, Yearimdang Publishing said, "As the semiconductor market has improved significantly recently, valuations of semiconductor corporations have also risen," adding, "With Future Hightech's results improving as well, the assessed value of the shares increased."
Meanwhile, signaling confidence in its growth, Future Hightech attached a put option to the remaining 10% equity. If cumulative operating profit exceeds 40 billion won over five years from 2026 to 2030, it can demand that Yearimdang Publishing buy the remaining shares at a high price within 70,000 won per share. Even if cumulative operating profit is 32 billion to 40 billion won, a high-priced buyback can be requested, albeit at a lower level than the former.
The acquisition of Future Hightech equity also included a tag-along right. If Yearimdang Publishing seeks to sell 45% or more of Future Hightech's outstanding shares to a third party, the shareholder with the remaining 10% equity can sell their stake on the same terms.